We started providing Virtual Data Room services in India from our New Delhi office in 2007. Back then, most of our efforts were aimed at educating potential users on how the benefits of Virtual Data Rooms far outweigh the traditional paper based physical data rooms, which were the norm (Download this Dataroom Whitepaper to learn more).
Investment bankers said that they perceived adoption to be low because of the ingrained habits of their clients who were set in their ways of using paper based systems and were not technologically savvy. Fortunately adoption slowly but surely took off amongst the M&A community. Every year since then we have seen a steady growth in the number of corporate transaction being run on Virtual Data Rooms.
Despite the positive trend, the growth trajectory was erratic due to our dependence on market conditions. India was actively doing transactions that involved cross border investors. When the global markets crashed in 2011, many transactions came to a standstill because investors pulled out. As a result a number of ongoing Virtual Data Rooms that were running multi-million dollar transactions were archived. The frenetic pace of activity that required the sharing of confidential information to sell stake, raise money or merge due to strategic reasons came down a trickle. During these times conglomerates that had their own corporate finance departments were the most active ones running multiple Virtual Data Rooms in different industries like telecom, industrials and consumer durables.
Things have since picked up. The global markets are recovering, the United States and Europe are coming out of recession and investors’ sentiments have shifted to optimism about the future growth of India. One of the barometers for market activity is the number of proposals that we send out each year. In 2013 we sent out one EthosData-Virtual-Data-Room proposals every three days, far surpassing the number of proposals that we had sent out in the previous two years, proving that the Indian market is vibrant.
The use of Virtual datarooms in India has now become a norm instead of an exception, showing the shift in attitude by every participant in the due diligence process. In the early days we had to constantly push the reasons why a Virtual Data Room is better than using a Physical Data Room. Today the advisors and the clients are well aware of the benefits because they have been exposed to our technology and its benefits in previous deals that they have been part of. Some of the factors which have made a Virtual Data Room provider like us a preferred provider for most are:
- Service. India is a very service driven market; its importance cannot be understated! It is also a term that is loosely used by practically every company to sell. How we built service into a core competency is by going above and beyond what our clients expected. In a transaction both the clients and its advisors are under constant pressure to deliver within a deadline. Managing a data room adds to the tasks that they need to carry out to make the deal successfully conclude. We take over that responsibility for the client by taking over all aspects related to data room management such as index creation, document format preparation, uploading, sending invitations to users and then following up to ensure that they got access, and most importantly managing the specific individual permission of each user who has got restricted access. Saving up to four hours per day for a client has made some of them lifelong customers. They also love the fact that our service comes as part of the package so they need to pay nothing extra.
- Document quantity. It is very difficult to estimate how much data will be uploaded to a Virtual Data Room. Usually any estimates made in terms of pages are wrong. Realizing the inherent limitation of this variable pricing approach, we offered our Indian clients fixed rates that made the cost per month certain from the start. As a result document quantity was a worry that was eliminated in the Indian market.
- Importance of being local. Having a local presence gives you an edge but having dedicated teams to focus solely on the Indian clients allows you to deliver in a manner that allows you to surpass clients’ expectations. Our whole company is structured in a manner that serves each client through dedicated team of expert deal coordinators. The dedicated India team caters to clients all over the country through our Mumbai and Delhi offices. These professionals know the ins and outs of running data rooms in every industry because they have worked with clients in each one. The ability of being locally present allows them to offer advice on how to structure a clients data, physically receive the data so that the client does not need to do the work and consequently run the data room for each client.
- Language. Every deal we have run has been primarily driven in English but often there is a need for the platform to accommodate different languages, especially when the interested investors are in countries like China or Spain. We have a dedicated team of expert deal coordinators looking after every region so they speak the native language in the country where the investors are based. This allows us to instantly resolve any issues that they might face. In addition, our platform also allows us to customize the language of the data room for each user so that a Chinese user can read the options in Chinese and a Spanish user can read the options in Spanish.
- Data privacy. Trust is key if you want to share some of the most sensitive information of your company on the internet. The company should have the gold standards required to make you feel comfortable. EthosData is part of a subsidiary of Moody’s, a multi-billion company that is known globally. That instills a lot of confidence in the standards that are followed throughout the company.
We are optimistic about the outlook of the Indian market. Harsh Batra, the Director in India, has been running the business in the country for the past 6 years. His leadership has allowed EthosData to lead the Virtual Data Room market in the country. Every year we are requested for more proposals and start more transactions. If you are looking at starting a Dataroom in India then talk to Harsh by contacting us.
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